Bangladesh’s garment exporters are feeling the effects of Brexit. Shopping centers in the UK are threatening to squeeze suppliers out of their already thin profit margins. UK retailers are themselves in trouble. With the pound plunging a drastic 16 per cent post-Brexit, this has driven up import costs for retailers in the UK. In most cases, the cost is usually passed on to the customer, but high street brands are reluctant to do this, and instead are pressuring suppliers to lower prices instead.
So, British retailers are adopting the strategy of buying from Bangladesh’s manufacturers at lower prices. As their cost of business has risen with the devaluation of the British pound, they have focused on buying more from Bangladesh but at lower prices. However, Bangladesh is worrying about more than just a weak currency. It is also concerned about what form of tariff regime the UK will implement once it leaves the European Union.
This could have implications on the preference many European countries have for the South Asian nation, which in turn would affect its gross domestic product. With the uncertainty the Brexit vote brings, it may lead to temporary suspension of the duty-free market access for all products for Bangladesh exporters.